Digital Music News recently reported on the lawsuit filed by
James Taylor against Warner Bros Records, arising out of a 2007 audit. When it comes to a dispute between artists
and labels, I am not shocked by much.
But being a child of the 70’s, a period when Warner Bros represented the
gold standard of artist-friendly record companies, I am still a little saddened
to see that an artist like James Taylor could be treated this way.
The
audit in question covered the period between 2004 and 2007 and included sales
of such records as “Sweet Baby James,” “Mud Slide Slim and the Blue Horizon,”
“Walking Man” and several greatest hits compilations. The amount of underpayment alleged by Taylor
is $1,692,726. The number of damage claims in the lawsuit total
52 in all and they comprise such elements as:
1. Over calculating the amount of “non‑royalty
bearing units”
2. Underreported sales
3. Excess free goods
4. Improperly applying a mid‑line
reduction
5. Violating the contractual
restrictions on compilations
6. Charging manufacturing costs as
“recording costs”
7. The current hot button issue of
treating downloads as sales rather than licenses
8. Not paying for record club sales
9. Not paying for master use licenses
10. Missed interest payments
11. Misapplying royalty rates
What
surprises me further is that though these claims total over $1,000,000.00 they
are in fact comprised of some relatively small dollar amounts (e.g.
misallocated returns: $800.00 charging manufacturing costs as recording costs
$3,700.00) as well as the big ticket digital claims.
All in
all this is a reminder that underneath the mystique of classic records, this is
a still a penny business and one that is becoming more difficult to navigate as the pennies get
smaller. . I hope this is not a sign of things to come.
